In an oligopoly market, collusion between firms usually leads to higher profits than noncooperative behavior. However, formal, overt collusion doesn't usually occur in the United States because: I. it is illegal.
II) there is an incentive for each firm to cheat on a collusive agreement.
III) an oligopolistic firm will typically prefer lower profits if the only way to make higher profits is to improve the profit position of its rivals.

Question

Quizplus · Accepted Answer

Collusion is illegal in the United States, and firms have an incentive to cheat on collusive agreements to gain a larger market share or profit.

In an Oligopoly Market, Collusion Between Firms Usually Leads to Higher